In connection with Hurricanes Maria and Irma, the Puerto Rico Treasury Department (“PRTD”) has issued various publications providing relief to extend filing deadlines and explaining the temporary procedures for taking possession of imported property. Here is a summary of such publications.
Time Extended to Submit Tax Returns, Payments and Information
On September 18, 2017, PRTD released Informative Bulletin No. 17-18 (“IB 17-18”) to extend the due date to submit the returns and payments regarding the Sales and Use Tax (“SUT”) and any other tax. Initially, the SUT return for the month of August, and any corresponding payment, that was due on September 20th, was granted additional time until September 27th. The same relief was applicable to any payment or deposit that was due on September 22nd. Later, PRTD issued Informative Bulletin No. 17-21 (“IB 17-21”), on September 27, 2017, to clarify the new deadlines for the tax returns and payments due to Hurricane Maria.
I. Returns and Payments
In the case of taxpayers other than “Large Taxpayers”, the following extensions will apply:
Any tax return or declaration that has either an original or extended due date occurring between September 19, 2017 and October 20, 2017, and any corresponding payment, is now granted an additional 20 calendar days.
Any payment and deposit of taxes which are due between September 19, 2017 and October 20, 2017, are now granted an additional 20 calendar days.
Any return, declaration or payment for which its original due date was extended in connection with Hurricane Irma by Circular Letter No. 17-13 (“CL 17-13”) or IB 17-18, will be automatically extended for an additional 20 calendar days from the date indicated on those publications. For more information regarding the revised due dates considering CL 17-13 and IB 17-18, see our Newsletter with Monthly Due Dates for Filing Tax Returns and Reporting Tax Information for Individuals and Business.
If the extended deadline, after applying the additional 20-days period, falls on Saturday, Sunday or a state or federal holiday, the deadline to file or make the payment will be extended until the next business day. For example, a return which is due on September 20, 2017 will be automatically extended to October 10, 2017.
The PRTD clarified in Informative Bulletin 17-22 that any penalties, interest and surcharges incorrectly imposed in a taxpayer’s account should be corrected automatically by the system in a reasonable timetable, but, if not, the taxpayer should visit the PRTD in order to correct the situation.
In the case of Large Taxpayers(1), the 20-days period will apply to all returns, forms and payments as explained above, except for:
Any SUT transaction made through SURI with due dates on September or October 2017, including, but not limited to, the Tax on Imports Monthly Return (Form SC 2915 D), Sales and Use Tax Monthly Return (Form SC 2915), and the bimonthly remittance of SUT to the PRTD (discussed in our August Newsletter). These transactions are extended for an additional 7-days period to that established on CL 17-13, Informative Bulletin No. 17-17 (“IB 17-17”) and IB 17-18.
Excise taxes on the acquisition of certain personal property and services pursuant to PR Code Section 3070.01 (4% excise tax on certain acquisitions by related parties), associated with August and September 2017, are extended to, October 6, 2017, and October 20, 2017, respectively.
Please note, that PRTD issued Administrative Determination 17-15, on September 28, 2017, to suspend the bimonthly remittance of SUT for the periods between September 1, 2017 and up to November 30, 2017, to those merchants whose average monthly SUT deposited during the previous natural year exceeded $2,000
(see our August Newsletter for more details). Those merchants should remit the SUT not later than the 20th day of the month following the month in which the transaction subject to SUT occurred or the deadline established in BI 17-21. Beginning on December 1, 2017, however, those merchants shall follow the rules for the bimonthly remittance of SUT. This temporary suspension of the bimonthly remittance is not applicable to Large Taxpayers, thus, Large Taxpayers need to continue to meet the bimonthly SUT remittances except for the 7-days extension explained above.
II. Information Requests by the PRTD
Any request of information by the PRTD, including the information requests associated with an audit procedure, will be granted and additional 30 calendar days to the deadline established in such notification. This is applicable to any information request that was due on September or October 2017.
On August 3, 2017, PRTD issued Circular Letter 17-12 (“CL 17-12”) announcing the launching of an audit by mail process. Pursuant to such initiative, the PRTD sent a letter to certain taxpayers requesting information and/ or a response within 30 days. On September 13, 2017, the PRTD published Informative Bulletin 17-16 (“IB 17-16”) granting an additional 5 calendar days to respond. Thus, the 30-days period granted by IB 17-21 is in addition to the 5 days established by IB 17-16.
The relief for an additional 30-days period, however, does not cover those taxpayers who received an information request by way of Form SC 6048- Request of Information for the Credits Reported on Form 480.71. The date to present the information with respect to Form SC 6048 is extended for two weeks, i.e., October 11, 2017 for Form SC 6048 information requests.
III. Taxpayer Rehabilitation Program and other payment plans
On March 17, 2017, PRTD issued Circular Letter No. 17-05 to establish the procedures for the application and approval of the payment plans under the Taxpayer Rehabilitation Program and specify the terms and conditions applicable to such payment plans. They informed that no penalties, interest or fines will be imposed to those taxpayers who do not comply with the payment plans under the Taxpayer Rehabilitation Program for the period between September 1, 2017 and December 31, 2017. This relief also applies to any taxpayer that has another payment plan not covered by the Taxpayer Rehabilitation Program, but which was in force on September 1, 2017.
(1) The term “Large Taxpayers” includes the following Merchants engaged in a trade or business in Puerto Rico: commercial banks or trust companies, private banks, securities or broker houses, insurance companies, telecommunication businesses, and any other merchant whose annual volume of business exceed $50 million dollars. For more information please refer to our August Tax Alert.
IV. Internal Revenue Licenses
Any taxpayer whose Internal Revenue Licenses are due on September or October 2017 will be valid for a provisional period of two additional months. By the end of this provisional timeframe, the taxpayer must have completed the corresponding processes to renew the license and, if approved, the PRTD will grant it retroactively to the original due date of such license.
Temporary Procedure for Taking Possession of Imported Property
On September 19, 2017, PRTD issued Informative Bulletin No. 17-19 (“17-19”) initially authorizing a temporary procedure to enable importers to take possession of food, medicines, raw materials, animals, perishable goods, electric power generators, and articles introduced by bonded importers (collectively referred as “Authorized Merchandise”).
According to IB 17-19, the importer shall visit the Satellite Office of the
Consumption Tax Bureau located at the Crowley Port Zone Isla Grande in San Juan and submit the bill of lading, manifest, copy of valid importer bond (if applicable), evidence of payment of any applicable duty, name of consignee and cost of merchandise. If possible, the importer shall send the above information by email to firstname.lastname@example.org.
The Authorized Internal Revenue Agent at the Satellite Office shall review the documents presented by the importer and upon its approval will type “Release Authorized” and sign the bill of lading. The original bill of lading signed by the PRTD shall be sent to the Office of the Director of the Consumption Tax Bureau and copy shall be delivered to the importer to be able to proceed with the release. The importer shall maintain a copy of the bill of lading authorized for taking possession manually in order to complete the monthly Imports Return.
If the articles to be introduced are subject to the payment of excise taxes or SUT, the Agent shall provide Form SC 2005, duly completed, to the importer. The Crowley Port Zone Satellite Office has an Internal Revenue Collection Center. If applicable, the importer should pay the taxes prior to obtaining the authorization for taking possession thereof.
Subsequently, the PRTD issued Informative Bulletin No. 17-20, on September 22, 2017, to inform that, to continue with their efforts to promote commercial operations and to expedite the flow at ports, manual releases are now authorized for all imported goods until further notice. The importers should follow the procedures established by IB 17-19 described above.
We will keep you informed of any new developments as they come to light.
Understanding that each situation may vary depending on the circumstances of each of our clients, we recommend that you reach out to us so we may plan for your situation.
BDO Puerto Rico offices are fully operational. We are committed to offer support to our clients and community through these challenging times. We are also part of the ongoing efforts to rebuild our communities as soon as possible. Should you wish to be part of the rebuilding efforts in Puerto Rico and the U.S. Virgin Islands, feel free to contact and partner with us.